US meat processor Smithfield Foods has said its first-quarter earnings more than doubled from the year-ago period, boosted by higher sales.
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The company posted net income of US$54.9m, or 49 cents per share, for the first quarter to 1 August, compared to $22.1m, or 20 cents per share, for the same period of the previous year.
First-quarter sales increased to $2.65bn from $1.98bn a year earlier. Pork sales increased from $1.13bn to $1.76bn, helping to offset beef sales, which declined from $605.4m to $594.7m.
“Earnings in the quarter reflected improved profitability in the hog production segment combined with strong results in pork. The strong performance in live production and pork was moderated by lower earnings in the beef segment,” the company said.
Earnings in the company’s hog production segment rose more than 70%, reflecting the impact of a 29% increase in live hog prices compared with the first quarter of last year.
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By GlobalDataBeef results were sharply lower as export markets remained closed to US beef due to the discovery of a single case of BSE in the state of Washington in December 2003. Additionally, lower cattle supplies kept live cattle prices high, pressured margins and created plant operating inefficiencies due to lack of cattle to process.
The company said it continues to be optimistic about opportunities outside the US.
“The recent acquisition of Jean Caby in France and increased ownership in Campofrio in Spain, combined with existing operations in France and Poland, provide the company with a significant platform to grow in both Western and Eastern Europe,” Smithfield said, adding that it will continue to pursue opportunities in Europe and expects to further expand its operations there in the near future.
